DBRS Morningstar Releases Commentary on How Development Finance Is an Important Support for New Housing in the UK

DBRS Morningstar released a commentary titled, “Development Finance – Important Support for New Housing; a Nonstandard Lending Product”.

This commentary focuses on residential development finance in the UK. Development finance typically involves the use of short-term loans to enable the purchase of land or property for development for commercial or residential use. It is a particularly important source of funding for small and medium-size enterprise developers.

Following operational reviews of development finance lenders in 2019, we have noted several differences between the practices in this type of lending and standard lending products.

Key highlights from the commentary include

-- Underwriting differences between development finance and traditional lending;
-- Standard practices for underwriters in the industry; and
-- Growth in this form of lending to meet building demand.

Notes:
The full commentary is available at www.dbrsmorningstar.com.

For more information on this credit or on this industry, visit www.dbrsmorningstar.com or contact us at info@dbrsmorningstar.com.

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